Single parenthood does not benefit the society

Single parenthood does not benefit the society The purpose of writing this research report is to discuss on the question that single parenthood does not benefits the society and it brings negative effects to the society. There will be a full explanation with some evidences to support the idea that single parenthood brings many negative effects to the society. Furthermore, this report will also have three main ideas on the negative effects as well as how they are likely to affect the single parents, children and society. At the same time, there will also include the weaknesses of arguments from the opponents. After a brief explanation of the three main ideas, there will also have some recommendations for this report. Understandably, most of the problems are come from the single parents towards the children, thus, single parents have to show some responsibilities towards this problem, several recommendations are needed to take into actions. However, before actions, it is necessary for us to have certain knowledge on the negative ef fects. Hope that this research report will pave the way to overcome the problems of single parenthood. 1.0 Introduction A family in society is often seen as a father, mother and their children. Nowadays this is not always the case. In this modern age, single parenthood is now acceptable in our society. It is a person who builds a family and cares for one or more children without marriage or without the presence of a husband or wife. According to information from the United States Census Bureau, in 2002 there are about 20 million children lived in a household with only their mother or their father. (Single Parent Central, 2004). Single parent families are families with children under age 18 headed by a parent who is widowed or divorced, not remarried, adoption, artificial insemination and surrogate motherhood, or by a parent who has never married. It also may be the result of an unforeseeable occurrence, such as death, child abuse, child neglect, or abandonment by biological parents. In this day and age, single parenting caused by adoption of a child are widely accepted. Adoption by single individuals has also soared. In 1970 only 0.5 to 4 percent of adoptive parents were single. In the 1980s this rate increased from 8 to 34 percent. According to the United States Department of Health and Human Services, 33 percent of children adopted from foster care are adopted by single parents. (Single Parent Central, 2004). A single parent who has chosen to adopt generally feel as though their life is incomplete without a child, they feel there is a loneliness which money or a social friend network cannot cure in their life. As a result of that, it has brought up an ultimate question which remains debatable among the society is, single parenthood does not benefits the society and it brings negative effects to the society. Do you agree? In the end, the answer for this question is yes. Single parenthood does not benefits us, besides, it brings many negative effects to the society. So, single parenthood is not encouraged by the society because it will bring impacts for the children of single parent and they are not growth in a complete and healthy family. According to a study conducted in the United States, children from a single parent background had a 77 percent chance of being physically abused, 87 percent risk of being harmed by neglect and overall 120 percent of being endangered by some form of child abuse. (National Service Personnel, 2010) Therefore, this report will mainly focus on the negative effects of single parenthood to the society. It will indicate that the single parents have financial problems, they cannot handle the pressure of raising the children alone. Furthermore, most of the children may have psychological problems due to lack of supervision and they may involve in social problems. It also include the weaknesses of the arguments from the opponents. Overall, this research results are related to the global range, including United States and some other European countries. The percentage of children of all races living in single parent homes has been steadily increasing since 1970. Percentage of Children in Single Parent Homes: 1970-2005 http://youthviolence.edschool.virginia.edu/prevention/images/singleparentchart.gif Source: U.S. Bureau of the Census. Current Population Survey Families and Living Arrangements, Historical Tables. Table CH-1: Living Arrangements of Children Under 18 Years Old: 1960 to Present. The proportion of children living in single-parent homes more than doubled between 1970 and 2006 from 12% to 28%, according to the Current Population Survey (CPS). Over the 36-year period, the share of children living with only their mother rose from 10 percent to 24 percent while the share living with only their father grew from less than 2 percent to 5 percent. A never-married parent is becoming more common in single-parent homes. Between 1970 and 2006, the proportion of children living with a never-married parent increased from 7% to 42%. In 2006, almost 4 percent of children lived with other relatives (including foster parents) and fewer than 1 percent lived with non relatives. Although there may be no direct, causal link between single parent families and youth violence, poor parenting is often identified as one of the most serious risk factors for unhealthy youth development. 2.0 Body of Content 2.1 Single parents cannot handle the pressure of raising the child alone. As a single parent, raising a child is challenging. It is like having two jobs at once. Psychologists believe that raising a child is a very stressful task that single parent will require to be a sympathetic mother plus a strict and providing father at the same time. Without proper guidance from counselors, a single parent will deteriorate emotionally due to stress. Psychologists suggest that in order for a single parent to manage both stress and take care of their child, they should enumerate things that brings them the stressors. (Maxx Family Life, 2010). Another important thing to regard is single parent have to struggle to do everything by themselves with no one else to blame if it does not get done. They have to learn that if something has to be done, then they are the one has to do it. Even if they have developed a network of friends which helps each other, they also may find that there are some jobs have to be done by themselves when no one is capable of or have time to do. According to The Single Mothers Survival Guide, the most common challenge for a single parent will be the financial problems. Opponents argued that single parents will have total control over expenditures than a two parents. They will have to plan on a specific date and set money aside to cover the expenses for their living that a two parents may not have. As single parents are handling the family finances, medically dental care, transportation, household tasks such as repairs and moving, so they must have a wise plan on their expenses. However, to oppose this, in 2002, as twice as many single parent families earned less than $30,000 per year compared to families with two parents present. At the opposite end of the spectrum, 39 percent of two-parent families earned more than $75,000 compared to 6 percent of single mother families and 11 percent of single father families. (Single Parent Central, 2004). Single parents are low income earners. They usually survive on only one income, whe reas other families usually have two parents working providing double income. Kristen Anderson Moore from the Child Trends claims that children living in households with single parents were five times as likely to be poor as the children in households where both parents were present. (Child Trends Research Brief, 2007). Child Poverty by Family Type. Children Age 0-11, 1994-1995 Note: Poverty is measured using Statistics Canadas Low-Income Cut-Off Lines. Source: NLSCY 17 percent of children in two-parent families and 68 percent of children in single-parent families were living in poverty, based on Statistics Canadas 1994 Low-Income Cut-Off Lines (LICO). Infants were over 20 percent more likely than 11-year-olds to be living in poverty, primarily because younger families have higher poverty rates. One in ten Canadian children live in households that are supported primarily by social assistance. 17% of children in two-parent and 68% in single-parent families live in poverty. Only 0.4 percent of children live with teen mothers. However, the overview report stated, even though the numbers were relatively small, this group of children demands particular attention because of the heightened risk of growing up in a poor household and having poor child outcomes. Child outcomes were examined in the areas of emotional and behavioral functioning, academic functioning and social functioning. Most children had no problems in these areas only 26 percent had one or more problems. About 10 percent of Canadian babies are born prematurely, and 5.7 percent had a low birth weight. There is a well established link between important indicators of health at birth, such as low birth weight and prematurity, health and social problems later in life, the authors of the report stated. Also, the NLSCY corroborated past research linking low household income and mothers who smoked during pregnancy with a higher incidence of low birth weight. 2.2 Children may have psychological problems due to lack of communication and attention from their parents. Children from single parent families are more likely to suffer emotional problems than those who are living with both parents. According to the survey carried out by National Statistics, children from the age of 5 to 18, the result showed that 3 percent had developed problems, 30 percent had emotional issues and 43 percent had behavior problems. They stressed that they had not found any direct causes of the problems in children but sure that will be a link to living in a not complete family. (National Statistics, 2008). Children who experienced the stressful events such as seeing their lovely parents divorce, appear in court, being tortured or serious injured by ones parent, they were likely to develop emotional problems. Others emotional issues includes anxiety, depression or become aggressive and antisocial behavior because they think that their parents divorce because they do not want to take care of them. Based on another survey, children whose parents had break up were 4.53 time s more likely to develop emotional problems than those children in two parent family and were 2.87 times to show the onset of behavior disorders. (National Statistics, 2008). As a fact, children in single parent families have psychological problems or abnormal behaviors due to the lack of family care. Consequently, these children suffer a lot from mental strain and stress, therefore they may change their moods very easily and frequently, sometimes they are not willing to listen to their parents. Another important thing to regard is single parents are the sole breadwinners for the family, so they cannot always spend so much time with their kids, this will lead to a poor relationship between them and single parents also may have less parental control over the children. In fact, the children are lack of supervision and they do not receive guidance or attention when they are desperately seeking for. As a result, the gap between the single parent and the children may widen, children might feel that friends are more important than their parents. Hence, communication is an important role in the developing and growth of a child. Parents who communicate and supervise their children will enhance their well-being. (Maccoby and Martin, 1983). Single parents should work to the best on doing everythings to make their children feel love, respect and secure. Opponents argued that in a single parent household with sufficient income, the parent will actually have more free time to allocate for the kids that a married parent would have. They can give much attention that a single parent will often bestow in the absence of a spouse and concentrate on their childrens studies in order to have a high level of academic achievement. Children who have that kind of support, even if it is only from one parent, are much better equipped to deal with the intellectual. On top of that, African American children in elementary school actually do better in school when their parents work outside of the house. The fact that children from low income, single parent families actually can have higher grades than children from two parent homes. (One-parent households and achievement, 1992). However, to oppose this, single parents who have less time overseeing their childrens study habits and helping them with their homework, therefore, the children may have discipl ine problems and do poorly in school, all these will lead to the lower of academic achievement. Thus, two parent household is better for a child, it is really not surprising. (Matt Garrett, 2007). 2.3 Children who involve in social problems like crime, alcohol and drug abuse are they face family problems. Children of single parents are more likely to involve in dangerous behaviors such as smoking, drinking alcohol, drug abuse, crime, delinquency, violence, sexual activity, suicide attempts, etc. This would link on logically from the psychological problems mentioned above. If a child is unhappy and dissatisfied, they need someone to share with their problems and they cant find their own parents to talk with, so they will most probably want to smoke and drink to release out their stress. Often, children left alone at home for long periods when their parents get outside to work, they may be unduly influenced by peers that can lead to unwanted behavior. While most parents will want to respect their childrens privacy, watching for early tell tale signs of drug use or other harmful behavior will save everyone much grief later. (David Richardson, 2007). Furthermore, in The Lancets Jan. 25 issue, the research showed among other things, that 2.5 percent of boys and 1.5 percent of girls in sing le parent families were hospitalized with alcohol problems and the increased risk for drug addiction, compared to just 1 percent of boys and 0.5 percent of girls in two parent homes. (Bootie Cosgrove-Mather, 2003). Another important thing to consider is adolescents are more negatively affected by parental discord prior to divorce . Later, as they from single parents families become adult, they are more likely to marry early, have children early and divorce too, follow their own parents footstep. (Demo and Acock, 1991). Understandably, children need to feel love and secure from their parents in the developing and growth, this may be difficult following a divorce, especially if it was an acrimonious divorce. Family and home are fundamental to a childs sense of self and if children lose confidence on this safe and loving place, they might lose their belief to the world. Opponents claim that in single parenthood, children prior two parents household included frequent fighting and discord between the adults, the absence of a partner means the absence of sometimes irrational and vehement arguments that the children would observe. Consequently, children can be benefit from living in a one parent home provided that the conflict is stopped. At the same time, children being raised in a single parent families can learn to be self reliant, they solve problems themselves. They also can learn to help with household chores and care for younger siblings, which makes them become more mature and gain in more responsibilities than other children in their age group as a result of altered family routines (Demo and Acock, 1991). However, to oppose this, in fact, having two parents is usually better than one. Children are actually learn by example, if their parents didnt have any fighting and discord, on the contrary, they are loving and caring to their children, then it will lead to a happy and well being family. So, be a good role model for the children to follow by setting a good example. 3.0 Conclusion Above all, it can be states that single parenthood does not benefits the society and it indeed brings many negative effects to the society. In this day and age, people pursue a high quality life and happy marriage, but their hopes will usually end up in a higher rate of divorce and greater hurt to the children than before. It will be better if divorced parents establish a new family life with their children, they should spend more time, patience, care and love to their kids. Single parents will have a unique opportunity to influence their children for good or ill, without the counterbalance of another partner. Therefore, based on the three arguments that are mentioned and with the aids of examples and supporting arguments, we could conclude that it is really important to give children a peaceful and stable home environment in the developing and growth of them. 4.0 Recommendations It is highly recommended that the society take steps to help in overcoming the problems of single parenthood whether is the single parents or the children. We should keep in mind that we want to live in a peaceful life and to look forward to a progressive society. Statistics indicate that single parents cannot handle the pressure of raising the child alone, so the government sector should provide some subsidies for single parents in order to reduce the expenses of single parents, instead they can also save the money for being used by future. Besides, some of the children may have psychological problems due to lack of communication and attention from their parents, therefore, single parents should spend more time with their children like have some family day events on holidays, always have a talk with them, do not let them feels that they are left out. Other than that, as a matter of fact, children who involve in social problems like crime, alcohol and drug abuse are they face family problems, the single parents and the society should avoid the happenings of such social problems because children who are still young, they do not know how to differentiate that what should do and what should not do. Hence, adults like us have the responsibilities to help and protect the children, especially their parents.

Rhetoric and Organizational Method Works

Rhetorical Modes QuizComplete the following chart to identify the purpose and structure of the various rhetorical modes used in academic writing. Provide at least two tips for writing each type of rhetorical device.Rhetorical mode PurposeExplain when or why each rhetorical mode is used. StructureExplain what organizational method works best with each rhetorical mode. TipsProvide two tips for writing in each rhetorical mode. Narration The purpose of narration is to tell a story whether it is factual or fiction. Having a plot, characters, protagonise, conflicts, and theme. Strong details like how each of our senses enteracts with different people, place or things. Also make sure to have a guide for your story whether it is factual, fiction or both. IllustrationDescriptionClassificationProcess analysisDefinitionComparison and contrastCause and effectPersuasionSelect one of the topics below and determine at least one rhetorical mode that would be appropriate for addressing the topic you selected. Write 100 to 150 words explaining the topic you selected, the rhetorical mode, and why you think this mode is most appropriate for addressing your topic.Pollution Workplace proposal for a new initiative Arguing to change a law Building a new park in your town Climate change Profile of your best friend or a family memberI would like to explain pollution to you by showing you the cause and effects, because this way you will know what may cause pollution and how it effects us. Since pollution is one of the major issue that we have today, it is important that we do what we can to minimize it so that we are able to let the next generation experience this beautiful world of ours.

Effects of Social Media Essay

For the past decade, society has been undergoing a technological revolution in communication. The creation of the internet was the foundation for the communication practices of today. Internet use began to facilitate asynchronous messaging, which later evolved towards instantaneous communication, synchronous messaging. This communication revolution occurred rapidly and was vastly accepted by millions of people. At an extremely fast rate individuals began creating personal profiles on social networking websites. A new form of communication is identified as social networking, which includes instant-messaging, text-messaging, e-mail, and any internet facilitated form of social interaction. Associating the interaction of these social mediums as a form of interpersonal relationships may have further implications on an individual’s identified norms and values regarding social communication. The person connected via social media is perceived as participating in a social interaction, but communicating by social mediums should not be considered similar to real-life interaction. see more:social media cause and effect Although some of the mediums, now, allow for camera and internet facilitated face-to-face communication, the interaction itself is mediated through a device. There must be a clear understanding of the what is considered real-life interaction, and social medium communication. The notion computational technologies have created an alternative way of thinking is introduced by Sherry Turkle. Further, individuals have begun to alter their way of identifying their ‘self’. The multiple interfaces offered by social media allows people to create an online profile, which allows individuals to illustrate their life experiences, personal appearance, etc. The ability to construct an individuals image may cause complexities regarding ‘self’ identification. Another aspect of change may be associated with computational technologies and the effects they have on they way people process information. On the other hand, there have been positive and negative associations with social mediums effects on the development and understanding of social interactions: social media offers communicative methods in which allow for individuals to become more connected to society through the internet. This study will examine whether or not regular use of social media to communicate with others may have further implications on individual’s sense of self and sense of values he or she identifies with social interactions. This work will relate the aspects of self-identification and the effected values associated with consistent use of social mediums. There is a self-perpetuating cycle regarding the use of social media. â€Å"It is worth noting that the ungrati? ed social and habitual needs of SM use can accumulate through their own endogenous effects over time, and motivate future SM use. In other words, these needs drive SM use, but are not grati? ed by SM use, and grow larger to stimulate heavier SM use in the future. In this sense, SM use gradually cultivates greater social and habitual needs to use SM. This may help explain the increasing popularity of SM. †1 The use of social media allows people to connect with seemingly any other individual. The ability to connect with people creates satisfaction in the user’s emotional, and social needs. If these needs are meet throughout the individual’s experience than he or she will likely develop a preference for online use, which may cause further submergence into the social mediums. Face-to-face interaction, or real-life, may have caused an individual that identifies him or herself as socially inept to refer to social mediums as an attempt to find a way to connect with society. If the individual experiences positive feedback during their use of these social mediums they are more likely to associate themselves online rather than face-to-face. The unbiased acceptance in the social medium facilitates a person’s need for social connection. Anyone can connect. People can find friends by previous associations, recommendations, groups of similar interests, and they can search for people with related interests in political, educational, environmental concerns, etc. The vast expectance of social media platforms has created a society in which any person can meet their needs of social, and emotional gratifications because of the exponential possibility of finding friends with similar interests. Social media is shown to expand the boundaries of social interaction, â€Å"Research has shown that SM [Social Media] provides unprecedented convenience and ef? ciency for creating, maintaining, and strengthening social relationships. Many features of SM facilitate self-disclosure and social interactions, such as the removal of geographic boundaries and the rich interaction opportunities afforded by networks of ‘‘friends’’ and information (e. g. , Ellison, Stein? eld, & Lampe, 2007; Lai & Turban, 2008). † 2 The contribution social mediums have on people’s ability to communicate across the world is one of the positive associations of connectivity. Creating and maintaining social relationships is exemplified by the ability for individuals to connect with seemingly anyone: the aspect of strengthening relationships may be more associated with the ability to connect with distant friends, or partners. The ease of accessibility contributes to the repeating cycle in which online social media creates through the exponential possibilities of connections; for example, each user is a multiplying factor providing an opportunity for millions of different connections when they join social networking. As consumers participate more through social mediums, they are exemplifying to other individuals that consistent online activity is accepted, as a factor of social interaction. This factor could lead to negative uses of social media, which will be explored later. Furthermore, the use of social media as another form of face-to-face interaction may positively effect individuals, â€Å"Using Facebook and MySpace as an extension of face-to-face interaction to maintain interpersonal relationships may enable users to broaden connections that they otherwise may not have and to strengthen existing friendships. This study reinforces the capabilities of social mediums for relationships; but also, highlights the importance of correct use of electronic media. Rather than using social media as alternative form of face-to-face communication, Carlyne Kujath^ hints individuals should monitor his or her use accordingly in order to avoid crossing the boundary of electronic media becoming a negative factor in society. As Kujath suggests the proper use of electronic media is the practice as an â€Å"extension† of interpersonal communication, instead of using social media as an alternative for real-life interaction. The recommended methods of using social networking facilitate both online and offline interaction. It is important to not exclude offline interaction; although online interaction has more positive effects on individuals who participated via social networking, â€Å"The key finding of this study was the lower social anxiety observed during online interaction than during real-life interaction, particularly in subjects with high social anxiety. †4 Online communication is attributed to easier social interaction. The individual feels more comfortable interacting through social networking. The vast amount of users facilitate a wider range of groups in which individuals can interact with in order to meet their needs of gratification, emotional and social. The lower social anxiety is likely associated with the available connectivity, and the emotional and social support found through social communication. While the higher social anxiety regarding real-life interaction is related to the inability to have control over the interaction. For example, an individual in a face-to-face interaction may not know the proper norms of real-life communication, and how to respond which may cause further disconnection from â€Å"real-life†. It seems the self propelling method of social media emerges, again. Users are compelled to use social media for easier, more controllable interaction. The high social anxiety found in face-to-face communication drives users to find an alternative method to gratify their personal needs. In contrast, the lower social anxiety experienced through online interaction exemplifies the positive effects social media can have on people. Online communication seems to meet the needs of people with various desires and intentions, and also satisfies their needs of personal gratification. Social media facilitates an environment in which people feel comfortable participating within. This use of connectivity contributes to satisfying an individual’s needs, which further compels the person to continue participating. People’s use of social media propels each person to connect further both online and offline, â€Å"These ? ndings indicate a signi? cant positive association between SNS [Social Networking Sites] exposure and social interaction. There is also a positive relationship between cellular-phone communication and social interaction. For every hour increase on average in SNS exposure or cell-phone communication, average face-to-face social interaction increased about 10 to 15 minutes. †5 Assuming each person’s interaction online was of positive influence people feel more comfortable with interpersonal communication. Online connection may be allowing people who feel socially inept to develop the norms and values of interpersonal interaction through practices of interaction. Surprisingly, the more online communication a person had positively effected the amount of face-to-face interaction they experienced. One might assume more time spent on social platforms causes less time for real-life interaction, but there are underlying factors of electronic media that can contribute to more face-to-face interaction. Individuals are who use online networking to communicate may use it to set up events, or communicate with friends or family to meet-up at a specific time and location. Also, individuals who use cell-phone communication, text-messaging, can synchronously converse with others in order to coordinate meeting up. The concept of deciding when a person wants to interact in real-life environments is attributed with the notion an individual can be connected or disconnected to social platforms whenever they want. Each person can decide when they want to respond to a person, or even if they want to respond. This follows the model of social networking sites: they allow for people to communicate whenever they desire through the ability to post a status. Social networks allow for each individual to determine and construct the online profiles. The people have complete control. Controlling the situation is also an aspect attributed with people’s preference for online communication in contrast to real-life. The non-mediated form of communication, face-to-face, does not allow for the people to have easy control over their interaction. For example, individuals who are speaking face-to-face may have an instance in which the opposing person does not feel comfortable causing negative associations with real-life interaction. Social media assists in giving people the opportunity to feel comfortable within their personal interaction with the electronic medium. The person has better control over the communication, and his or her emotions by the option to stop messaging, or log-out. In addition, individuals online can perform this interaction synchronously, or not: people do not have to respond immediately in any electronically mediated interactions. In example of people’s association of social media with communicative interactions, â€Å"In addition, compared to of? ine interactions, the mediated nature of SM interactions offers users a more controllable environment to strategically present themselves in their interactions (Dunne et al. 2010; Walther, Slovacek, & Tidwell, 2001)†.   The concept of â€Å"presentation† alludes to the notion people can construct their online image however they desire. People felt more comfortable in the interaction in which they had the most control. They can decide when they want to communicate, which allows for them to develop a better understanding of their emotions in order to respond accordingly. Individuals are now becoming accustomed to mediated synchronous communication in which there is an expected delay between messages allowing for each person to think. Although electronic media facilitates instantaneous communication, people have begin to construct an alternative norm. People developed the concept of thoroughly thinking before responding. This identifies a shift in the values associated with social interaction pertaining to/regarding the transition individuals made from face-to-face interaction to the mediated electronic communication. The effects of this shift told by Turkle, â€Å"A seventh grader once told me that the typewriter she found in her mother’s attic is â€Å"cool† because you have to type each letter by itself. You have to know what you are doing in advance or it comes out a mess. The idea of thinking ahead has become exotic. †7 The transition towards mediated social interaction and the related concept of instant communication has led people to become disconnected with the ability to think as they speak, rather than before they speak. A young child is the example illustrating the effects social media has on aspects of social interaction. Further, individuals’ ability to construct their online environment is reinforced by the capability to predetermine their response: the person can even attempt to coordinate the conversation in order to direct it in their desired way. In real-life this ability to lead a conversation would show a developed understanding of social interaction, but as the child shows people no longer relate those particular values of social interaction with face-to-face communication. People redefined the values associated with real-life interaction. This change is directly attributed to the shift to using electronic media for communication. Moreover, the change in values is correlated to the substitution of social medium for face-to-face communication. Social media has further effects related to individual’s behavior. Another instance of change regarding interpersonal interaction is exemplified by how people manage themselves in real-life social environments. The immediate accessibility to social medium via electronic devices constructs a social environment allowing consistent interruptions of interpersonal communication. People have begun to use their cell-phones to text message, check social networking sites, and receive e-mails. The social world is now filled with the beeps and buzzing sounds of cell-phones, constantly.

Essay on “Portfolio Theory”

Essay on â€Å"Portfolio Theory† Portfolio optimization Portfolio optimization is a mathematical model that is applied in the process of investment decision-making across a set of assets or financial instruments. This model was invented by Prof. Harry Markowitz in the 1950s. While developing this model, Markowitz was trying to solve the following problem: Given a fixed collection of assets, determine the portfolio that combines the assets using an optimal fixed percentage asset allocation given the risk preferences of an individual investor (Prigent 2007). Portfolio optimization is based on a number of assumptions, including the investment will be for a single period of time, asset prices display a jointly distributed lognormal random walks, unconstrained asset allocation, and the objective is to capitalize on the predictable utility of wealth at the end of period. Portfolio optimization can be undertaken using various techniques but the most common include quadratic programming, mixed integer programming, as well as nonlinear programmin g. In addition to being applied as an investment decision-making tool, portfolio optimization is also used in divestment and capital allocation decisions (Wachowicz and Horne, 2008). Auto-correlation The term auto-correlation is defined in various ways, depending on the field in which it is being applied. Statistics, auto-correlation is a correlation coefficient, which describes the correlation of a time series with its own past and future values. In some cases, auto-correlation is also known as â€Å"Serial correlation† or â€Å"lagged correlation†, describing the correlation between elements of a chain of numbers arranged in time (Wachowicz and Horne, 2008). Auto-correlation is usually applied in the determination of non-randomness in data, as well as to determine a suitable time series model in non-random data. When determining non-randomness, only the first autocorrelation is required, but in the case of a suitable time series model, a number of lags are required to be plotted. Although auto-correlation can be determined using various tools, the correlogram serves as the best tool for this purpose. In finance, autocorrelation is used in determining the future pr ices of given assets based on the historical prices of such assets (Ehrhardt and Brigham, 2010). Serial correlation As mentioned above, auto-correlation is sometimes known as serial correlation as well. However, in this case, serial correlation is described as the relationship that exists between a certain variable and itself over different intervals of time. This type of correlation is very common in the case of recurring patterns especially when the level of a variable affects its level in the future (Wachowicz and Horne, 2008). With the field of finance, technical analysts apply this type of correlation in examining how the historical price of a given asset can be applied in predicting the future price, and this is the main connection between auto-correlation and serial correlation. Thus, serial correlation is used in the study of how past events forecast future events. Particularly, it is helpful in checking whether and how a given movement of price will lead to a dissimilar price movement. Runs test Runs test is one of the non-parametric tests. It is described as a statistical tool that is used in evaluating whether there is an element of random occurrence in a string of data in a given definite distribution. Particularly, the runs test is applied in determination of the occurrence comparable events, which are divided by different or dissimilar events. In statistics, a run is described as a chain of successive points, either below or above the regression curve. To be more precise, a run is a successive chain of points with either negative or positive residuals (Anderson et al 2011). If the data is randomly distributed; and Ka are points above the regression curve, and Kb points below the curve, then the expected number of runs is calculated as follows: [{2KaKb}/{Ka + Kb}] + 1. The runs test is used in a number of areas in finance. The most common area where this statistical tool is used is in the prediction of returns of stock. The runs test is usually applied in the random walk theory, one of the theories that are applied in determination of future security prices. Distribution of returns In statistics, the term distribution refers to a universal function that is utilized in formulating partial differential equations’ solutions. In finance, the term is used in various areas, the most common being explaining on how the trading volume of a market varies in different times without or with minimal price appreciation (Wachowicz and Horne, 2008). Thus, distribution of returns can be described as how investment returns vary in different times, based on various variables. Distribution of returns is important for various trading problems. One of the crucial uses of distribution of returns is risk management, which involves an estimation of the likelihood of more extreme price changes (Clark and Downing 2010). Notably, there are a number of statistical distributions, but in finance the most relevant include the lognormal and the normal distributions, which are commonly used in the analysis of financial asset prices and returns. When considering the distribution of return s, there are a number of concepts which are considered including the following: Mean This is the average of a given data. It is calculated by calculating the sum of all the financial data and then dividing the sum with the number of data. As such, it is simply the central tendency of a set of data divided by the size of the set (Clark and Downing 2010). Mode The mode is generally described as the most appearing number or set of numbers within a given distribution. Median The median is described as the middle number within a distribution arranged in either a descending or ascending order. This implies that before a finding the median data must be arranged in either of the above stated order. Although it is possible to find the median through a try and error method, there is a mathematical technique which has been specifically designed for this purpose: [{size of the data set} +1] /2 (Clark and Downing 2010). Standard deviation Standard deviation is a measure of how a given data is distributed from the mean. Simply, it is a measure of variation from the expected value of mean. It is usually calculated by getting the square-root of the variance (Prigent 2007). In the context of finance, standard deviation is applied on the yearly rate of return of a given security to estimate the volatility of that security. Thus, it is generally used by the investors in measuring the expected volatility. Standard error of the mean A standard error is generally described as an approximation of errors in sampling that affect a statistic. A standard error of the mean, which is also known as the (standard deviation of the mean) is an approximation of the degree in which the calculated mean is expected from by probability from the true mean (Clark and Downing 2010). Test for significance The test of significance is described as a technique of making due allowance for fluctuations that may arise in the process of sampling, which are likely to affect the outcomes observations and experiments. Before setting the tests of significance, first a hypothesis must be formulated (Hafner et al. 2008). Coefficient for skew and kurtosis Skewness is used in measuring the degree and direction of departure from the level symmetry. On the other hand, kurtosis is a measure or estimation of the tallness and sharpness of the central peak in a data distribution. In a normal distribution, there zero kurtosis and skewness (Black 2011). The coefficient of skew, also known as Pearson’s Coefficient, is described as: Coefficient of Skew = 3{mean- Median}/ standard deviation On the other hand, the coefficient of kurtosis obtained by calculating the 4th moment about then mean, then dividing the answer by the variance of the distribution. Thus, Coefficient of Kurtosis = (1/N)∑((Xi M)/ÏÆ')^4, i=1 to N Jerque-Bera coeffiency for normality This is a test that is used to testing whether a given data have the kurtosis and skewness of a normal distribution. In this case, it is a test carried out on a given data to establish whether the data have a kurtosis and skewness of zero. For a normal distribution, the Jerque-Bera co-efficiency should display a chi-squared distribution. Tangent portfolio and efficient frontier The term tangent portfolio refers to the portfolios of stocks and bonds that are intended for long term investors. Since most people do not like losing their money about two times as much as they get the pleasure of making it, the tangent portfolios begin by asking how much a person is willing to lose in the worst situation without having to bail out of the market: 15% 28% or 38%? When the maximum percentage is selected, the tangent portfolios try to provide a high return rate that amount the risk. On the other hand, Harry Markowitz (1952) defines efficient frontier as the gold curve, which runs along the top of the achievable region. Portfolios that are on the efficient frontier are optimal in that they present maximal returns that are expected for various levels of risks that are given as well as the minimal risk for the given expected return level (Greg 2012). Sharpe Ratio Sharpe ratio was created by laureate William F. Sharpe in order to measure risk adjustment performance. The Sharpe ratios are derived by deducting the risk free rate from the rate return for a portfolio and then the standard deviation is divided by the result obtained earlier The Modigliani and Modigliani measure are use to characterize the way a portfolios’ return rewards an investor for the amount of the risk taken (Sharpe 2009). This means that the investment that took a whopping contract more risk that other benchmark portfolio, but had only a small performance advantage get lesser risk adjusted, than the one that may have taken dramatically small risk relative to the benchmark, but did have similar returns. Jensen and alpha is a term that refers to the differential between the return on the portfolio in excess of the risk free rate and the return explained by the market model (Kevin 2006) The Jensen measure is based on the CAPM Capital Market Line and Capital Asset Pricing Model The Capital Market Line (CML) is a line that is utilized in the CAPM to indicate efficient portfolio rate of return, based on the standard deviation and risk-free rate of return for a given portfolio. It is usually drawn starting from a point of risk-free security to appoint that is considered to be a risky security region. CAPM is a model that defines the connection between the risk and the expected return. It is generally applied in pricing of risky assets (Miller et al 2009). According to this model, systematic risk is the only risk that is taken into consideration by rational investors, since such risk cannot be avoided through diversification. The theory behind this model argues that, a security’s expected return is equal to the security’s risk-free rate plus a risk premium, multiplied by systematic risk of the security (Watsonand Head 2007). Mathematically: ra = rf + Betaa (rm-rf) Where Betaa = risk premium rf = risk-free return rate ra = price of the asset rm = market rate of return Extensions and limitations of CAPM CAPM has a number of limitations. To begin with, the model is established on unrealistic assumptions. For instance, risk free assets do not exist. Secondly, it is challenging in testing the validity of this model. Finally, the other limitation is that Betas vary in most cases, contrary to the model which assumes that they are stable (Abeysinghe 2010). Reference List Abeysinghe, R.L. 2010. Limitations of Capital asset pricing Model. Retrieved from http://ezinearticles.com/?Limitations-of-Capital-Asset-Pricing-Modelid=3364246 Anderson, R.D., Sweeney, D.J., and Williams, A.T. 2011, Statistics for Business and Economics. London: Cengage learning. Black, K. 2011. Business Statistics: For Contemporary Decision Making. New York: John Wiley Sons. Clark, J. and Downing, D. 2010. Business Statistics. Dallas: Barron’s Educational Series publishing Ehrhardt, C.M., and Brigham, F. E. 2010. Financial Management Theory and Practice. London: Cengage Learning Greg B., 2012, Behavioral Investment Management: An Efficient Alternative to Modern Portfolio Theory. New York City: McGraw Publishers Hafner, M.C., Hardle, W., and Franke, J. 2008. Statistics of Financial Markets: An Introduction. New York: Springer Kevin S., 2006, Portfolio Management. New York: PHL Learning Publishers Kobold K., 2009, Interest Rate Future Market Theoretical Concepts and empirical Evidence. New York: Walter de Gruyter Publishers. Miller, P.F., Vandome, F.A., and McBrewster, J. 2009. Capital Asset Pricing Model. London: Alphascript publishing. Prigent, J.L. 2007. Portfolio Optimization and performance Analysis. Boston: Chapman and Hall/CRC. Sharpe F., 2009 Portfolio Theory and Capital Market. New York City: McGraw- Hill Publishers Wachowicz, M.J., and Horne, C. J. 2008. Fundamentals of Financial Management. London: Prentice Hall. Watson, D and Head A, 2007, Corporate Finance: Principles and Practice, 4th edition, FT Prentice Hall, pp222–3. Xiaobo, L. 2007, Some Problems In Stochastic Portfolio Theory. Kansas City: ProQuest Publishers